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Hello from Woodward Financial Advisors! We hope our newsletter finds you well and enjoying the beginning of spring.
To start things off in this quarter's newsletter, Alex Richani, CFP®, explains and helps you consider how to respond to the current debt ceiling situation. Next, get to know several of our newer team members, Laura Neal, CFP®, and Elizabeth Eastman. Additionally, we're excited to share that our colleague, Wilson Li, has been promoted to the role of Associate Advisor! Finally, we've included several reminders for clients as well as a few of our favorite recipes in "What We're Dishing Up."
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Well, we’re here again. Welcome back!
Out of the economic loop and wondering what the debt ceiling is? Let us get you up to speed! The debt ceiling refers to the maximum federal debt our government can accrue, as prescribed by congress. If the debt ceiling is hit and we’ve exhausted all available “extraordinary measures,” the US government will be unable to cover its numerous daily expenses and, at least temporarily, default on many of its obligations; such as social security payments, salaries for federal employees and military members, as well as interest payments for bond holders.
While the consequences of not increasing the debt ceiling are very serious, this is also the reason why it’s safe to assume it will be addressed by congress. In fact, history is on our side as we’ve been here many times before. Since 1960 congress has acted 78 separate times to raise the debt ceiling, either permanently or temporarily (1). For those of you doing the math, yes this averages almost 1.25 times per year. These increases have occurred under both major political parties – 49 times under Republican presidents and 29 times under Democratic presidents.
We can also take solace in the fact that we’re not alone. Exhibit 1 below shows us that most members of the Organization of Economic Co-operation and Development (OECD) carry government debt/GDP ratios above 50%, 13 of which exceeding 100% (2).
Exhibit 1: General government debt as a percent of GDP in OECD (2021 or latest available)
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Source: Debt/GDP data from OECD (2023). General government debt as a percent of GDP, 2021 or latest available. General government includes central, state, and local governments and the social security funds they control. Debt is the sum of currency and deposits; debt securities; loans; insurance, pensions, and standardized guarantee schemes; and other accounts payable.
Exhibit provided by Dimensional Fund Advisors (DFA).
The relationship between government debt, solvency, and local stock market returns are also quite complicated. Two relatively recent examples of sovereign default are Argentina in 2020 and Ivory Coast in 2011, with preceding year debt/GDP ratios of 90% and 46% respectively (2) (3). These ratios are far below the highest in OECD which slightly exceeds 250% and has been above 200% for over a decade without default.
Research by Dimensional Funds (DFA), illustrated in Exhibit 2, shows us that there is not a strong relationship between sovereign debt and stock market returns. While countries with higher debt levels tended to produce higher equity returns, this difference is unreliable as the t-values are near zero (which indicates debt levels are a poor statistical predictor of returns).
Exhibit 2: Premium returns in high and low-debt countries
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Each year, countries are classified as either high- or low-debt depending on whether their debt/GDP was above or below that year’s median debt/GDP, defined separately for developed and emerging markets.
Exhibit provided by Dimensional Fund Advisors (DFA).
While you may be hearing loud public voices talk about how the debt ceiling is going to affect markets and how you should take action to avoid catastrophe, here at Woodward Financial Advisors we believe that often the loudest voices are the ones you should be most cautious of - this is no exception. Our interpretation of the data from past debt ceilings events suggests that sticking to your investment plan, developed with your financial goals and personal risk tolerance in mind, is the best course of action you can take.
Written by Alex Richani, CFP®
References:
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We're thrilled to introduce you to Laura Neal, CFP®, Wealth Advisor at WFA! Laura joined the firm this past fall. Please join us in welcoming Laura and read more about her below.
Tell us about your family? My husband, Ben, and I settled back in Tyler, TX in 2006 after living for a period in the Detroit suburbs. We have a daughter, Bridget (15), and a son, Jamie (11). We live 15 minutes or less from Ben’s parents and my Mom and her wife.
Do you have pets? 2 Rescues: 6-year-old Border Collie/Blue Heeler mix named Liberty Bell and a 2-year-old Tuxedo cat named Mr. Midnight.
What are your favorite books? The Pillars of the Earth by Ken Follet and The Spiral Staircase by Karen Armstrong.
What is your favorite recipe to make? My husband has taken on the role of primary cook in the last year, so my favorite recipe is anything he is cooking.
Favorite vacation destination? Anything with woods and water close by.
Favorite board game? Rummikub.
Best concert you’ve been to? Brandi Carlile at Red Rocks in Colorado.
Favorite movie? Young Frankenstein.
Famous person whom you’ve met? Where/how? I was at the SNL 2000 “More Cowbell” taping and was in the bathroom at the same time as Christina Aguilera (at the after-party). This is, literally, my only cool story.
What are your pet peeves? Sticky hands (I have an 11-year-old boy who thinks he’s allergic to water).
Goals for 2023 or beyond? Develop a regular meditation routine and go to enough yoga classes to justify the yearly membership that was “such a good deal.”
Favorite quote? A therapist once told me that you may be juggling a lot of balls in the air, but what you don’t know is that they are mostly plastic.
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We're equally delighted to introduce you to our new Client Experience Specialist, Elizabeth Eastman! Fun fact: Upon accepting the CES position, Elizabeth became WFA's first fully virtual employee. Please join us in welcoming Elizabeth and read more about her below.
Tell us about your family? My husband, Darren, and our two kids, Paige (5 going on 15) and Preston (2), and I all recently moved to a suburb of Boca Raton, FL, after living in Seattle for nearly a decade, and we lived in Texas prior to that. We spend a lot of time outside getting reacquainted with the sun and running between kid’s activities. We are happiest when we have good food, good wine (or good Capri Sun pouches!), and good laughs.
What is your favorite recipe to make? Dessert, hands down. I’m a cookie fanatic and I have a secret ingredient. No, I will not tell you what it is but I’ll be happy to share the cookies! My family’s favorite flavor is chocolate with Reese’s peanut butter chips. I also love to bake cakes and breads from scratch for holidays and birthdays.
TV show you can’t go without watching? Frasier is my guilty pleasure. I assume it’s not ‘cool’ because no one talks about it, but I love the Crane family’s wit and wisdom as they navigate their tv-family problems.
Famous person whom you’ve met? Where/how? I have met Gary Sinise in Dallas, Texas on several occasions while volunteering for Snowball Express, a charity for the families of fallen soldiers. I helped prepare the venues for his arrival and make whatever arrangements they requested in their contract.
Best concert you’ve been to? Lyle Lovett and his Large Band. He’s an incredible storyteller and showman! We learned he’s been playing with some of his 20-piece band members for over 30 years, which speaks to his captivating personality. It also helped that the concert venue was on the lawn of the picture-perfect Chateau St. Michelle winery, near Seattle, Washington.
Do you have pets? We don’t have any right now, but my mother is like Dr. Doolittle, so as a child we had dogs, cats, horses, cows, bunnies, and just about anything that moved slow enough and could fit in an old fish tank became a pet, too, even creepy-crawlies like salamanders, tarantulas, and scorpions.
What’s the last country you traveled to outside the US? Most recently I visited Bimini Island, which is the westernmost of all the islands that make up the Bahamas. The Caribbean never disappoints with its soft sand and bright blue water.
You have a (free) roundtrip plane ticket to anywhere in the world, where do you go? Athens, Greece. The islands were fine, but mainland Athens won my heart. I cant wait to go again.
Goal for 2023 or beyond? I’m studying for my Financial Paraplanner designation and looking forward to successfully completing the course. I’ve read encouraging statistics about the children of working mothers having increased employment and earning potential in their futures. Planning for their futures in every way I can fills my cup!
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Wilson Li Promoted to Associate Advisor |
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Please join us in congratulating our colleague, Wilson Li, who was recently promoted to the role of Associate Advisor. Wilson joined Woodward Financial Advisors, Inc. in 2021 and has worked in our Client Service department since then, taking on new roles with increasing levels of responsibility from day one. Wilson’s name may already be familiar to you as you’ve likely spoken with him on the phone (or emailed with him) while he served as lead Client Experience Specialist. In that role, Wilson led the firm’s operational functions such as money requests, opening new accounts, updating IRA beneficiaries, charitable giving, and many other crucial activities.
“Wilson has been such a valuable member of the team since joining Woodward Financial Advisors just a couple years ago. Wilson has such a strong work ethic, an attention to detail, a desire to learn and do more, and a genuine caring nature about him. He is an excellent teammate to each of us at the firm, and I have no doubt our clients will find him equally diligent as he transitions into his new junior advisory role on your team. We are beyond excited for Wilson!” – James R. Miller, CFP®
“I am excited for this opportunity not only because it is a step forward in my career, but because this allows me to serve and work with you on a more all-encompassing and personal level and becoming an even bigger part of helping you achieve your financial goals. I look forward to seeing and meeting you, being a part of your meetings, and getting to know you better!” – Wilson Li, Associate Advisor
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- If you are a client and have not yet securely provided us with your 2022 tax return, please do so at your convenience so your advisory team may review it. You are welcome to upload your return to the "Shared Documents" folder in the vault of your personal financial website with us. You may also have your accountant provide it electronically to us, mail it, or stop by the office to drop it off.
- If you've started your spring cleaning early and have paper documents with sensitive information to dispose of, you are welcome to bring them to our office. We will gladly add them to our locked shred bin for secure disposal. Or, if you have yet to mark this off your "to do" list, you're welcome to bring your sensitive documents to us for shredding throughout the year.
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Every newsletter several members of our team share a favorite meal they've been making recently. We hope you may find something that piques your interest, and we would be delighted for you to share a current favorite recipe as well! |
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Jim Miller - Chicken Fajita Burrito Bowl (Serves 4)
Ingredients:
- 2 boneless chicken breasts
- ¼ cup taco seasoning
- 1 tbsp olive oil
- 1 lime juiced
- 1 red onion
- 1 red bell pepper, sliced
- 1 green bell pepper, sliced
- 1 yellow bell pepper, sliced
- 2 cups brown rice
- 1 13.5 oz can black beans
- 1 batch guacamole
- Sour cream
- Cilantro
- Pico de gallo
Method:
- In a large bowl make a marinade using the taco seasoning, olive oil and lime juice. Toss the chicken and vegetables in marinade and allow to marinate (in a zip lock bag ideally) for 1 hour.
- Preheat oven to 375 degrees F.
- Spread ingredients across a sheet pan and allow to bake for 15 minutes or until meat is cooked through. If you want to add some char, broil for 2-3 minutes at the end.
- In a bowl spread out rice and then top with all the desired fixings. Enjoy!
Recipe credit: Modern Proper
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Alex Richani - Kishk Manoushe
Ingredients:
4 pitas or naan bread
½ cup of kishk
2 medium tomatoes, finely chopped
1 medium onion, finely chopped
1 orange or red bell pepper, finely chopped
1 teaspoon of tomato paste
1 tablespoon of red pepper paste
½ cup of olive oil
Optional toppings:
4 teaspoons of raw sesame seeds
1 tablespoon of lemon juice
3-4 mint sprigs
4 teaspoons of Labneh
Feta cheese
Kalamata olives
1-2 mini cucumbers, raw and sliced lengthwise
Method:
- In a bowl, mix the kishk, tomatoes, onions, bell pepper, tomato paste, red pepper paste, and olive oil in a large mixing bowl. You may need to add some water to loosen the mixture to a sauce-like consistency.
- Preheat the oven to 400 degrees and put the bread in to warm for 2-3 minutes while the oven is preheating – you just want to warm the bread to make it more pliable. Remove the warmed bread and spread the mixture over the bread using the back of a spoon. Return the prepared manoushe to the oven when it reaches 400. Bake for 7 to 10 minutes on the bottom shelf until the edges are slightly golden, watching carefully so they don’t burn.
- Serve the hot, family style.
Notes:
- If you’d like to incorporate the raw sesame seeds, you should sprinkle these on top of the kishk mixture prior to baking.
- If you’d like a tangier flavor, add lemon juice to the fully prepared manoushe.
- Feel empowered to top your kishk manoushe as you wish. Some of my favorite toppings include mint, labneh, feta cheese, kalamata olives, and mini cucumbers.
Please let us know if you try out one of these recipes and share your tips with us. Enjoy!
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Thank you for reading our March newsletter! Please reach out if there is anything we can do for you.
Sincerely,
Your Friends at Woodward Financial Advisors
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Woodward Financial Advisors
1504 East Franklin Street, Suite 105, Chapel Hill, NC 27514.
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© 2018 Woodward Financial Advisors | 1504 East Franklin Street, Suite 105, Chapel Hill, NC 27514. All Rights Reserved. |
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